Baffled - Need Help...

My_Fathers_Daughter

Hi All,

I have read the articles and several of the threads and I still can't see what I am best doing in my situation...it may be a case of 'wood for the trees' but my head just doesn't seem to compute the information...so can anyone help me please.

DH and I need a savings account - his business is beginning to take off and we are more financially secure than we have ever been. We think we can save about £1,000 a month as a basic (which we would transfer into the account by direct debit) but then want the facility to put in extra when we can afford to.

Instant access would suit us best (just in case).

Sorry if I am being a bit dumb but as I said - my head just doesn't work the right way!!!

debbie42

If you just want an instant access savings account then pick the highest rate that has the facilities you want. There is a sticky thread available on savings accounts in the forum.

Have you used your ISA allowance yet for this year, or thought about what you want to do with it? That's a consideration for some cash if you don't want to put all your allowance in stocks and shares.

DocProc

It seems to me you merely need something quite simple like an Internet Savings Account.

These have their withdrawals and deposits through a linked account, which is usually your own current account, which of course you would set up to be accessed online.

The two favourite online savings 'instant access' accounts on here, which both seem to react quickly to B of E rate changes, are Icesave (5.95% AER) and HiSave (6.05% AER).

Either of these can take from 'a few days' to as much as 'a couple of weeks' to set up and it does help greatly, from an ID viewpoint, if the applicant is on the List of Registered Electors.

With each of the two online savings accounts above you can make either 'regularised' or 'one off' payments both in or out.

I hope that helps.

TomJ

First off, you need to use both of your cash ISA allowances, so as much as possible of the interest you earn is tax-free; the National Savings and Investments Direct ISA is instant access and pays 6.05%, with a promise to rise if interest rates rise. Each of you can put £3000 into an ISA, and it would be foolish not to unless you really want to give HRMC 20% or more of your interest.

You may want to consider a regular savings account next. I pay £250 pm into one with LlloydsTSB on which I get 8.0%; this is also an instant access acct with no withdrawal penalties.

Given you've got £1000 a month, you could then try the Coventry First acct from the Coventry Bldg Society. It's currently paying 6.1%, again with a promise to rise in line with interest rates. However, this rate includes a bonus for the first year; the unenhanced rate isn't really competitive. I have an acct with them and will probably close it after the year, moving my cash to whoever is paying the best rate then; if that seems too much hassle, DocProc's advice seems good to me.